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I did a search for condos in the VREB area of the MLS (2008/01/30). Today there were 946 condos for sale!

Only 196 were listed below the December 2007 median price ($293000). Do the owners mostly figure their condos are better and they deserve more, or are there a lot of flippers who need more? Will they get the big dollars they seek?

Speaking of which, on what crazy planet are condos priced at 6 or 7 or 8 or 9 or 10 times the local median family income? Oh yeah, I forgot, it's this planet.

By the way, there were also 226 townhouses, and 758 single family homes listed for sale as of today. Again, mostly priced over the recent median prices.

Which reminds me, on what crazy planet could a world class city have more condos listed for sale than single family homes?

Your comments are welcome, assuming the comment function is working. If it seems to be working for you better, let me know, it may have been the page caching, which was turned on previously for a one minute cache.

"The cold--um, yes. Well, actually, the house is permeated with unspeakable evil."

 ***

For those stuck on the idea of home ownership as bliss, remember, some houses could be a tad less delightful upon better acquaintance.

Oh darn, I just spent $500,000 on this place? You mean I can't find another rental down in Cook St Village, I have to spend the rest of my days in this run-down haunted house on [...] (pick a dillapidated suburb)?

Are haunted houses as overpriced as everything else these days?

Which reminds me, I once went to see a townhouse, and after looking around, the agent said "I have something to tell you, some terrible not nice stuff happened in this house.  Really terrible not nice stuff."

Of course, even that horrible townhouse is now worth twice as much.

If only I'd been prepared for 5 years of nightmares, I could have doubled my money!

From Man Stroke Woman.

It was all predicated on the idea that real estate prices would keep going up and up and up....

Sound familiar?

"Greed, sure, greed on both sides of the table."

^{...a year ago...}

"However we would not be surprised to see a reversal sometime this year, but remain convinced that 10 years from now we will see prices higher yet”

- Ozzie Jurock

^...now...

I did a search for condos in the VREB area of the MLS (2008/01/28). Today there were 935 condos for sale! That's a lot of condos.

The neat image of Condo Planet was from the creative commons section of Flickr, and was published there by phirleh.

These comparisons are based on the December 2007 VREB numbers. January 2008 numbers will be out soon.

So today for the heck of it I did another quick snapshot search of the MLS, to see how things are shaping up for listings vs median prices - what's happening, where is the inventory building up so far this year? Over or under? Unsurprisingly, again it seems a pattern continues with lots of homes available above the median prices ($536,000 or so), with fewer cheaper homes available. On a related note, listings of all types of million dollar plus properties are also still increasing.

Consider the single family home average price chart for Victoria, which shows increases in nominal prices over the years. The graph looks incredibly like a hockey stick, up to the end of 2007. And now, it seems that houses are selling below the median rate far more easily. Could that be a sign that affordability issues are starting to affect the market?

On Friday January 25, 2008, there were 192 million dollar plus properties for sale on the MLS in the VREB area. Based on the level of sales seen in November and December 2007 according to VREB, that is now almost a year's worth of expensive inventory. Any uptake in sales activity has so far failed to stem the ballooning of that particular market segment. Million dollar penthouses, anyone?

Meanwhile, for single family homes, the search found 472 single family homes for sale with prices above the median, while only 201 single family homes were for sale with prices below the median.

Condos, ouch, don't let this top secret information escape to the public, there might be a sudden panic among the presellers!

There were only 184 condos priced below the median price ($293,000), with a staggering 742 listed for sale with prices above - a jump of around 200 listings from just a couple weeks ago.

Meanwhile, townhouse inventoriess, with a median around $388,000 also increased, but not nearly as much. There were 58 Townhouses listed at prices below the median, with 176 priced above.

I think I am detecting a trend. In the spring optimistic sellers all think their houses are worth more than the average property. Why not? History has taught them that any old POS is worth hundreds of thousands, why should this spring be any different?

Still, that's a lot of condos to be listed this early in the year. Is this the beginning of the fabled condo glut? If so, what do you think that means?

How about some comments and discussion on what is happening in the market? IF HHV and Prairie Boy can get over 100 comments per topic, can't I get at least 5 or so? Is this stuff worth reading or valuable, or just too obvious? I don't know. Anyway, it seems to me that the condo glut has begun and I would be interested to hear any anecdotal evidence that supports or disproves that.

How are those presales at Bear Mountain going these days, anyway?

Yes, even I think about buying some day. After waiting a few years for a correction, it gets a bit depressing sometimes considering these unstoppable housing trends. At other times, like maybe now, the trends almost seem in my favour. That's tantalizing. Or maybe just too personal.

Meanwhile, I still have family members telling me buy anyway, anyhow, because "You can't lose in the long run."

Funny how most people say that but the same people still want to make money on real estate in the short run, too.

Animated well, recorded well, poignant yet to the point. What happened? Well, watch this little video and find out.

Thanks davegirtsman.

And just when all the small time real estate speculators in aggregate have managed to lose billions for the banks, a missing small-time trader has apparently done the same.

World financial markets have never been more stable, I'm sure.

And where will the bank make up the missing money? Out of thin air?

A piece from Reuters that lays out how the subprime crisis helped trigger other financial problems that continued and continue to spiral out of control.

"When it comes to buying a home today, family conditions often outweigh market conditions."

Yeah NAR, if I'm stupid. 

In one quarter?  14 bilion?

PPffft.  Gone.

Ouch. 

The Victoria area single family median reached an all-time high of $536,000 in December 2007, and at the moment, when comparing MLS listing prices to this new high median, there are far more properties available above the median than below it.

As of January 14, 2008, there were around 196 single family homes valued at less than $536,000.00 listed on the MLS in the VREB area. At the same time, there were 414 single family homes listed with asking prices above the median.

Based on an MLS search today relative to the December 2007 median prices, sales below the median are not absorbing new 2008 inventory completely. Sales above the median price have not even dented the inventory of high priced homes yet.

Looking at how many single family homes were over/under median prices was such an interesting exercise, I extended the investigation to the condo and townhouse markets. And I think I may have discovered something about the current state of the Victoria condo market, which is not yet obvious with the euphoria of the spring selling season just around the corner. The truth is, if you are asking over the median price for a condo, you already have a lot of other competition from other sellers.

The December median condo price in the VREB area was approximately $293,000. Today there were only 156 condos listed for sale below this median price. At the same time, there were 588 condos listed with prices over the median price. As the median is the point at which half the sales meet, it would appear that above the median, there is triple the inventory chasing around half the buyers.

When I looked at townhouses, the situation was similar. The median price for a townhouse in December 2007 was approximately $388,000. As of today there were only 57 townhouses priced below the median, while there were 156 listed above it.

Some places close to the medians for all property types may sell for a bit more or less than their listing prices, but except in a sharply rising or dropping market, this effect should have a negligible effect on the basic premise, which is that above the medians, there are far fewer buyers chasing far more properties.

It would seem some Victoria sellers are pricing themselves out of the market. As we watch these numbers over time, let's come to a basic understanding: the housing market in Victoria depends on local buyers - and it is now getting far too expensive for most locals, even highly paid professionals could not in most cases hope to purchase the homes they have resided in for years now. Certainly, by and large, their children have no hope to do so en masse when their baby boomer parents depart the scene.

It seems that maybe these affordability issues are starting to have an effect, since the segment where inventory is not building up for all three property types, is in the sub median price segment.

Is this a hot market? I don't think so. It looks to me like the fabled condo glut is building up that signals and precipitates every housing crash, unreported or even unbeknownst to some of the local market participants.

Well, not entirely unreported. Let's look at where these numbers are at the end of the month, to get a better picture of the situation. Will a condo glut crush the market?

Maybe its not that bad. Maybe I'm misreading the whole situation. Maybe.

Goldman Sachs representative thinks ultimately house prices will fall 20-25% in the US, with the bulk of the drop still ahead.  66% chance of recession in 2008.  So housing problems will remain awhile longer.

What, the investment banks can't cook up a scheme to get us out of this mess?

Meanwhile, in Victoria, prices are at all time highs in the real estate market, and we are of course still cheap and undervalued compared to all those other prime real estate spots around the globe.

So forget about US economic news, it will have no effect whatsoever. 

This is just a simple total: how many properties are available in various price ranges, regardless of property type, on a particular day, in the Victoria Real Estate Board area.

This graph shows the inventory available in a search of the local MLS on January 11, 2008. As you can see, the numbers of properties listed has dropped in many price ranges since the start of the year - particularly the more affordable price ranges. There are actually less properties listed now then there were 10 days ago. However, not all is great.

Continuing with a previous theme, there still are around 11 months of "million dollar plus" inventory on the market again, based on the sales levels for these types of homes the last few months. Inventory of "million dollar plus" properties remains at a high level relative to other price ranges. It will be interesting to compare whether any increase in this sales inventory is offset by a comparable increase in actual sales numbers by the end of the month. If the numbers don't align, it could signal a worsening of the glut at the top of the home market. Will these numbers go down, because if they don't, the local market has not shown the capability to produce large volumes of high priced sales. In which case, how long until impatient seller(s) drop prices down to price levels where there is more activity?

Tougher borrowing costs, more expensive properties, fewer first time buyers, less equity extraction, recessions brewing, baby boomers downsizing - it all looms on the horizon like a giant squall, but at this point the Victoria market continues sailing along. If not exactly hot, it's not cold, either. At this point - tepid?

Will spring sizzle? Hmmmm.

Lets see where the condo market goes in the next few months. I take the view that, despite downsizing boomers, any trouble will show up in the condo market first - if there is trouble.

Anyone bailing on $400,000 presales? Anyone unable to get financing to close deals on those half million dollar retirement condos?

Stay tuned. Your comments and opinions on these matters are welcome.

A twenty-something property millionaire gone bust likens what happened to "surfing the wave".

He aquired 40 properties by recycling the equity from one into the next.

Great when things are going up, you almost don't need to know what you are doing, if you are in the right place at the right time, riding the boom.

One bad deal crushed his empire.

On another note, the second half of the piece acknowledges how out of whack things were getting in Britain, when it takes a slump to get first time buyers back in the property market.  How can a market exist with property owners recycling equity into more and more homes, buying from each other, while nobody new is buying into the system?  Sounds like property entropy.

So let's hear it for a bit more of a slump then!  A few more speculators gone, and a few more first time buyers, that's just the recipe to return this whole business to normalcy.

Peter Schiff said: "We had a dot com bubble, we had a housing bubble, you can't rely on a consumer economy, you have to produce!"

Oil has gone from $28 a barrel to $99 a barrel in the 5 years since January 2004.  Eerily, this kind of price action is seen somewhere else - yes, real estate.  However, unlike oil, there are still plenty of houses out there, and more are being built all the time. 

One panelist passes off this price action in oil as a mania.  Peter Schiff disagrees, and drops the "i" word, yes that's inflation, pure and simple. 

And what happens as the Yuan appreciates and oil gets cheaper for the Chinese while it gets more expensive for Americans as the dollar drops further?

Don't forget $100 dollar a barrel oil doesn't cost nearly as much as $100 dollar oil would have cost a year ago.  And what if commodity pricing switches to Euros or gold?  Doesn't that weaken the US economy further, as unused dollars flood home?

Some good stuff in this round table video. 

A realtor says it is a terrific time to buy, then throws out the scare tactic line that, due to high commodity prices, future construction will be more expensive. As Peter deconstructs this argument, the realtor loses her cool.

Peter Schiff states the decline in housing values has just begun, after the real estate agent says she won't bore the viewer with the numbers.

Bottom line: housing prices are still too high - whether they have gone down or not.

Peter goes so far as to claim he was one of the only people warning about excessive real estate prices last year - I don't know if I agree with that - Nouriel Roubini and Robert Shiller were getting this message out last year as well.

As of January 2, 2008, there were 160 single family homes valued at less than $536,000.00 for sale on the MLS in Greater Victoria. At the same time, there were 415 single family homes listed for sale with asking prices above the median price.

While the median reached an all-time high of $536,000 in December 2007, at the moment there are far more properties available above the median price than below.

The breakdown of single family home sales extrapolated from VREB stats for December 2007 is as follows:

$536 thousand or less = 93 sales.

At this rate, there are less than two months of sub median inventory currently available.

$536 thousand to $1 million = 80 sales

Since there were around 286 single family homes available in the median to 1 million dollar range, there are currently around 3 ½ months of inventory in this price range.

Over $1 million = 14 sales

With 129 single family homes for sale with asking prices above one million dollars as of January 2, 2008, there were around 9 months of million dollar plus inventory on hand in early January 2008, based on the December VREB stats.

So if we consider December a low watermark for inventory, the potential for sales over the one million dollar mark appears dim going forward.

Historically, January usually sees quite a few new listings, with an accompanying increase in sales. We will have to see if that does anything to dispel the tendency of Victoria buyers to prefer sub median priced homes at a rate that keeps the more affordable segment of the single family home market from building up.

So if your house is priced over $1 million, just like last month, the same message applies - be patient, it might only take 9 months to a year to sell your expensive, beautiful house, for that high price you believe you deserve.

This is just a simple total: how many properties are available and in which price ranges, regardless of property type, on a particular day, in the Victoria Real Estate Board area.

This graph shows the inventory available in a search of the local MLS on January 1, 2008. I consider it to be a kind of low watermark, after the 2007 listings expired. Does it provide a useful base to compare later as inventory is added during the spring sales season?

Continuing with a previous theme, according to this starting inventory, there is only around 11-12 months of million dollar plus inventory. I intend to track these sales each month, as long as VREB continues to publish them, to see how out of whack the numbers on million dollar plus properties can get from sales, before something starts to give.

For example, the 16 such properties sold in November would not make much of a dent in the 188 still listed today, at the start of 2008 - that marks around 11-12 months of inventory.

I am looking forward to the VREB stats for December 2007, to be released tomorrow. As the December sales are mopping up for the year, I don't expect much to be excited about. Sales should be down, so should average and median prices. Active MLS Inventory is around 1769 today. Inventory will need to go up a lot before prices start going down in the new year. Will that happen?

I never would have predicted the gains that occurred in 2007 at the end of 2006. Will the same hold true in the year ahead? Stay tuned.

I was talking to a friend at a New Year's party, and he mentioned that his brother and three others each put up 5 grand to buy a pre-sale condo at Bear Mountain. While prepared to take possession, the general idea seems to be to resell before that.

After all, this brother and his 3 friends will never be owner occupiers of this one condo.

How much of this is going on, and how many similar people will walk away from the chips they put on the table, if it looks like closing will lead to bigger losses?

Anyone else have similar anecdotal stories to report?